RWJ Dividend Type Payments

Invesco Exchange-Traded Fund Trust II Invesco S&P SmallCap 600 Revenue E dividend

Although RWJ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco Exchange-Traded Fund Trust II Invesco S&P SmallCap 600 Revenue E to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 3:05 PM ET):

Invesco Exchange-Traded Fund Trust II Invesco S&P SmallCap 600 Revenue E (RWJ)
Bid Ask Last Change Volume P/E Market Cap
46.74 46.75 46.72 +1.19 119K - 0.4B

RWJ Dividend-Like Income Using Covered Calls

With RWJ at 46.72, here's a table showing how big the annual "dividend" (i.e. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield Annual Premium Cents/Day
3% 1.40 0.4
5% 2.34 0.6
10% 4.67 1.3

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On RWJ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 47.00 0.70 66 1.1 0.25 (0.5%)
5% Yield On RWJ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 47.00 0.70 66 1.1 0.25 (0.5%)

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